Beware of Cyber Extortion

November 4, 2015 at 8:42 am Leave a comment

The FFIEC, the Council of banking regulators including the NCUA, issued a “joint statement” yesterday warning financial institutions to take steps to guard against cyber-attacks involving extortion. Numerous news reports have chronicled the increased vulnerability of businesses to computer hackers that use malware to encrypt data on a company’s computers making it impossible for the institution to access key data. The data is then ransomed.

Another increasingly common attack businesses are vulnerable to is the so-called denial of service attack in which hackers threaten to take down a company’s computer systems unless certain demands are met. The FFIEC’s statement warns all financial institutions that they face “a variety of risks from cyber-attacks involving extortion” and outlines several risk-mitigation steps that they should be taking. At the same time, the regulator stressed that the statement “does not contain any new regulatory expectations.”

So, here is my very practical take-away. Remember that all risk assessments involve periodic adjustments of plans and procedures as new threats emerge. With this statement, examiners have signaled that they consider cyber-extortion to be a serious threat. As a result, you should take the time to make sure that your risk assessment and procedures address this threat to your credit union’s operations. Obviously, the steps a five member credit union will take are vastly different than those expected of $1 billion credit union.

Senate Republicans Hold Serve

The most important election on the State level last night was the special election held to fill the Senate Seat vacated by Republican Senator Thomas Libous, who was convicted of corruption-related charges. Broome County Undersheriff Fred Akshar easily beat Democrat Barbara Fiola. This win means that the Republicans maintain control of the State Senate as they head into an election year. The Senate Democrats held onto the Brooklyn Senate seat previously held by Senator John Sampson, who also lost his seat following a criminal conviction on embezzlement charges. Three open Assembly seats in Queens and Brooklyn were also held by the Democrats.

For the political junkie, the most interesting result of the night was in Nassau County, Long Island – where Democrat Madeline Singas, who was making her first run at political office, defeated Republican Kate Murray for the office of District Attorney. According to Newsday, she leads by 30,000 votes. The size of the victory and the fact that a Democrat won over a well-known local Republican politician is certain to raise the eyebrows of Democratic operatives as they decide where they have their best chances to take control of the State Senate.

Entry filed under: Compliance, New York State, Regulatory. Tags: , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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